TINSA released its official house price index for Spain today.
January 2013 showed the biggest single January year on year drop in average price per meter square since the crisis began.
Whilst there are variations across Spain in the coastal areas prices per square meter dropped by 14.9% in January 2013 against Jan 2012 prices. This excludes the islands who have held up much better than mainland Spains coastal areas.
For the Mediterranean coastal areas the last 10 years has seen massive changes. In January 2003 the average price per mtr square was € 1.303 this was an increase of 20.1% from the previous year. Prices increased all the way through to 2008 when they peaked at € 2.537 per mtr square.
Since 2008 prices have dropped by a total of 42% in the coastal areas with January 2013 average price per mtr square for the month coming in at € 1.475.
January 2013 was a quiet month for completions mainly due to the December activity levels as buyers rushed to complete to achieve the tax breaks that were in place until the end of December 2012. The low activity levels may have skewed somewhat the monthly average prices but the indications are we have not yet hit rock bottom on price. Whilst the uncertainty on prices continues the Banks remain cautious on the loan to value maximums they will provide for Spanish Mortgages. It is unlikely this caution will disappear in the foreseeable future.
Spain is not alone in the decreases in average prices per mtr square, even in the UK very few areas have actually seen any increases since 2007 and UK average price per mtr square currently sits for 2012 at around € 1.968. Given prices in the UK have not changed much since 2007 and at its peak Spanish Property was hitting € 2.537 per mtr square in real terms the price of property in Spain now is actually back to much more acceptable and affordable levels.